Arizona’s general fund collections rose 11.6% in fiscal 2011, ending an unprecedented three-year span of consecutive declines.
State forecasters had expected a growth rate of 5.6% for the year. The revised rate is the highest annual increase since fiscal 2007.
When lawmakers approved a fiscal 2012 budget in April, the revenue shortfall was estimated at $332 million. The final numbers would provide another $300 million that could be appropriated, state budget officials said.
The base revenue total of $7.22 billion does not include the $873 million brought in during the year, the temporary 1% increase in the sales tax rate or other one-time collections.
Collections from the extra 1% were in line with earlier expectations.
The latest revenue report by the Joint Legislative Budget Committee said if those one-time adjustments are included, general revenues totaled $8.34 billion or $335 million more than forecast.
The state’s high-water revenue mark was $9.62 billion in fiscal 2007.
The legislative analysts said most of the 2011 revenue increase is due to an 18.5% increase from individual income tax returns due to higher capital gains and fewer taxpayers eligible for mortgage deductions.
The income tax bulge accounted for $305 million of the $335 million of unexpected revenue.
“The fiscal 2011 rebound appears to be more a reflection of one-time factors than a rapidly expanding economy,” the report said. “It may still take two to four years before the state replaces the jobs lost in the recession and substantially reduces its 'underwater’ mortgages.”
The total sales tax generated $3.46 billion in fiscal 2011, up 2.5% from fiscal 2010.
The individual income tax brought in $2.86 billion.
The Finance Advisory Committee will update state budget projections at its October meeting.
The committee in April estimated a shortfall of $600 million in fiscal 2014 when the temporary sales-tax increase will expire.
